From Bard: The text is about the 2016 paper "How Can 'Smart Beta' Go Horribly Wrong?" by Rob Arnott and his colleagues at Research Affiliates, or RA. The paper

From Bard: The text is about the 2016 paper "How Can 'Smart Beta' Go Horribly Wrong?" by Rob Arnott and his colleagues at Research Affiliates, or RA. The paper argued that four specific factors - size, quality, momentum and low beta - had very low value characteristics relative to history. In other words, to get exposure to those factors you had to buy stocks with poor value characteristics, such as high price to book value ratios, and that in similar periods in the past those factors had underperformed. The paper's title and some of its rhetoric was that factors would crash in the near future, but the actual recommendations were more modest: investors should readjust expectations for lower factor returns from non-value factors and increase emphasis on value. In 2022, RA published a follow-up paper, "Revisiting Our 'Horribly Wrong' Paper: That Was Then, This Is Now." In this paper, they claimed victory, arguing that their 2016 predictions had come true. However, the evidence they presented was not convincing. The chart they used to support their claim was entirely driven by the low beta factor. When that factor was removed, there was no obvious trend. Moreover, the lowest performance was from the value factor - the one that RA suggested investors overweight. Finally, while some factors in some markets would have disappointed investors over the period, none can be described as horribly wrong. In conclusion, the 2016 paper by RA was not as prescient as its authors claimed. Their follow-up paper did not provide convincing evidence that their 2016 predictions had come true.